In an earlier paper (Mathur, 1996), the author had investigated the impact that a heat pipe heat exchanger (HPHE) has on the energy consumption and the peak demand on an existing air conditioning system. A detailed performance investigation was carried out for a number of cities for year round operation of the HVAC system with HPHE. Heating degree days and cooling hours (ASHRAE, 1993) were used for predicting the energy savings with the HPHE. In order to calculate the true energy savings, a more realistic approach is to use the BIN weather data (ASHRAE, 1993). The author has developed a simulation program that can predict the energy savings by using the BIN weather data. The investigation has been carried out for 33 US cities with widely different climactic conditions and the results are presented in this paper. Economic analysis reveals that a simple retrofit on an existing HVAC system can pay for itself in less than a year. Based on this investigation, it is recommended that electric utilities use this technology as a demand side management strategy for reducing energy and peak demand